As a small business owner, you are the face, the muscle, and the heart of your business. But after months or even years of work, you may be reaching the point where you can no longer afford to wear every hat. Or maybe your business is growing and you need more arms, legs, fingers, and toes. So you started hiring employees. But are you ready for the stress and legal obligations that come with hiring your first employee? New hire paperwork, liabilities, expenses, and a vast array of confusing and extensive employee forms.
I’m sure I’ve scared you away and you’ll be intently waiting for my post called, “Monday is the new Friday for terminating employees.” But do not fear – CMax is here! Here’s a simple checklist of everything you need to be prepared for with your new hire:
Before First Day:
- Conduct a background check on all new hires
- Get an employer identification number: www.irs.gov
- Get workers’ comp insurance: Protect employees that could get hurt on the job. It’s required by most states.
- Register with your state labor department: You’ll have to pay state unemployment taxes
- Set up a payroll system to withhold taxes. This is critical if you don’t want to have to pay fines from the IRS.
- Report all new hires to your state’s new hire reporting agency
- Adopt workplace safety measures
- Create an employee handbook documenting your company’s policies
- Set up employee benefits. If you’re smaller, you can partner with a company like Ardina to obtain optional benefits for your employees at a lower cost.
On First Day:
- Have each new hire fill out a W-4
- Have new hires fill out an I-9
- File IRS form 940
Now, I’m sure that this process seems daunting. But once you hire your first employee … wait, it never really gets easier until you are large enough to have a dedicated HR manager. That being said, take a look at professional employment organizations. PEO’s take the guess work out of personnel management and administration. PEO’s may save you money but I’m positive that they’ll save you time.
Give us a call, if you’re interested.